SOCIAL CAPITAL Social Capital Resources accruing to an ego actor through direct and indirect relations with its alters that facilitate ego’s attainment of its expressive or instrumental goals. “… inheres in the structure of relations between persons and among persons” (Coleman 1990:302) “… at once the resources contacts hold and the structure of contacts in the network” (Burt 1992:12) “… resources embedded in a social structure which are accessed and/or mobilized in purposive action” (Lin 2001:12) Social liabilities The “dark side” of social capital: constraints or obligations that hinder actions and goal attainment - Ties to an inept team leader block her subordinate’s promotion - Obligations to visit in-laws thwart your plans to see the Big Game

The Strength of Weak Ties Mark Granovetter’s (1973) classic article on finding a job argued that weak-tie relations (casual, indirect) give actors better access to new information and opportunities. But, strong ties (emotionally intense, frequent, direct) restrict the flow of new information from diverse, distant sources.  Intimates (kin, close friends) share same knowledge, norms, beliefs  Although strong ties offer beneficial social support (“haven in a heartless world”), they also result in impacted information & coercive conformity to the social circle’s expectations (folkish society)  Weak relations (acquaintances, coworkers) serve as bridges to other social groupings having information & resources unavailable within one’s intimate social circle; provide opportunities of individual autonomy via unique structural location [Simmelian cross-cutting]  Persons with many weak ties can gain speedy advantages in learning about – and cashing in on – new entrepreneurial opportunities  Irony that weak ties actually provide a stronger form of social capital for career advancement, financial dealings, conference invitations

Closure vs. Structural Holes James Coleman: High trust in a community with full closure networks (“strong component”) and strong ties fosters mutual assistance obligations and the social control of deviant behaviors (e.g., disciplining children who misbehave in public) Ronald Burt: Ego gains numerous competitive advantages and higher investment returns if ego’s weak, direct-tie relations span structural holes, thus serving as bridge between its alters Holes create social capital via brokerage opportunities ► Ego actor gains earlier access to flows of valuable information ► Ego fills structural holes by forging new ties linking its unconnected alters, extract “commission” or “fee” for providing brokerage services ► Low network constraints result in high performance rewards ► Ego maximizes its self-interests by controlling & exploiting information, playing one actor against another (“tertius gaudens”)

Structural Holes from Ego’s Viewpoint SOURCE: Knoke (2001:237) To gain information and control benefits from structural holes, players must identify bridging / brokering opportunities and fill in those gaps A typical office-politics situation: - Ego fills a structural hole between B and both A’s, extracts commission - Ego can’t fill any hole between A’s - Indeed, maintaining ties to both A’s is redundant (and costly) - If Ego cuts a tie to one A, where should it invest time & energy forging a new tie that will maximize its entrepreneurial opportunities?

Who Has Greater Information & Control Benefits? Burt (2005:14) S-hole is the mechanism underlying Granovetter’s claim that weak ties are more useful because they give actors access to nonredundant information

Two S-Hole Measures: Nonredundancy … Ability to develop a structural hole decreases in proportion to strength of direct and indirect ties between alters in an ego-centric network. Network is nonredundant if it has numerous ties to diverse social worlds. Info access, timing, or referrals from alter j are redundant if ego has contact with alter q who is also strongly tied to j. Number of nonredundant contacts = effective size of i’s ego-centric network Find level of redundancy between ego and specific alter j involving 3 rd actors q; subtract from 1; then aggregate across all of i’s direct contacts. Thus, effective size of i’s network is : p iq EGO i q j ● ● ● m jq p iq = portion of i’s investment in q m jq = marginal strength of j-q tie Redundant contact is connected with others:

… and Constraint Find constraint on ego i by aggregating all indirect investments (2-step paths) through third parties (q) and add this sum to i’s direct proportional investment in j. Squaring defines constraint as a measure of the lack of primary structural holes around j: p iq EGO i q j ● p qj Network constrains ego’s entrepreneurial opportunities when an alter q, in whom ego has heavily invested, itself has invested heavily in alter j. p ij ● ● “Contact j constrains your entrepreneurial opportunities to the extent that: (a) you’ve made a large investment of time and energy to reach j, and (b) j is surrounded by few structural holes with which you could negotiate to get a favorable return on the investment” (Burt 1992:54). Constraint contact also has the dependence of others:

Hole Signature Each network actor has a characteristic hole signature, whose pattern reveals the distribution of opportunities and constraints across relationships in the player’s network (Burt 1992:65-71). D C A B E Time & Energy Allocation (p ij ) Constraint (c ij ) SOURCE: Burt (1992:66) Ego i’s allocation (investment) in five alters (p ij sums to 1.00) Constraints (c ij ) on entrepreneurial activities (few structural holes when close to investment line) Hole signature is the unconstrained portion of Ego’s total investment (shaded area). “… provides a quick visual impression of the volume and locations of opportunity and constraint in a network” (p. 67) Proportion

Lin’s Social Capital Theory Nan Lin’s general theory of social capital comprises a set of propositions, which apply under the scope conditions of pyramidal status structures (e.g., a bureaucracy where actors in higher positions control more capital than subordinates) and actions that “evoke other actors as intermediaries” (2001:59). Core social capital propositions: 1. Success of an action is positively associated with social capital 2. Better the origin position, more likely to access and use “better” SC 3. Stronger the tie, greater SC positive effect on expressive action success 4. Weaker the tie, greater access to better SC for instrumental action 5. Proximity to a network bridge, better SC access for instrumental action 6. Location strength contingent on resource differential across a bridge 7.Networking effects constrained by nearness to top or bottom of hierarchy

Mobilizing Social Capital Job-seekers, entrepreneurs, work teams try to deploy their network ties to acquire the use of resources held by their alters. But, they may not always succeed in gaining access. Johnson & Knoke (2005) argued that the volume of social capital to which ego actually has access is the aggregate of resources that ego could probably mobilize from its alters: SC i = ego i’s social capital from the J alters in its ego-network p ji = ego’s perceived probability of access to use alter j’s resources R j = total resources controlled by alter j that could be useful to ego i  Community social capital is the aggregate of community orgs’ SC  Strength of ties in an interorg’l network ≈ probability of access  Look for structural holes that network brokers could fill, which will increase a community’s SC by mobilizing more total resources

How much Social Capital could EGO mobilize? R 2 =7 p 1E =.8 EGO R 1 =4 R 3 =5 R 5 =3 p 2E =.5 p 3E =.2 p 25 =.2 R 4 =6 p 14 =.5 p 24 =.8 p 36 =.8 R 6 =9 R = resources held by actor; p = probability of actor giving access Thicker line = higher probability of accessing another’s resources

Practical Implications of Social Capital As network analysts, we should practice what we preach: Cultivate your connections to people & organizations that control access to important information and social resources Pay it back … and forward. You increase your chances of access by always being willing to help those in need Remember: It’s not what you know, nor whom you know, but whom you know who knows what you don’t know – and is willing to tell you so.

Burt, Ronald S Structural Holes: The Social Structure of Competition. Cambridge, MA: Harvard University Press. Burt, Ronald S “Structural Holes versus Network Closure as Social Capital.” Pp in Social Capital: Theory and Research, edited by Nan Lin, Karen S. Cook, and Ronald S. Burt. New York: Aldine de Gruyter. Burt, Ronald S Brokerage & Closure: An Introduction to Social Capital. Oxford, UK: Oxford University Press. Coleman, James S “Social Capital.” Pp in Foundations of Social Theory. Cambridge, MA: Harvard University Press. Granovetter, Mark “The Strength of Weak Ties.” American Journal of Sociology 78: Johnson, LuAnne R. and David Knoke “‘Skonk Works Here’: Activating Network Social Capital in Complex Collaborations.” Advances in Interdisciplinary Studies of Work Teams 10: Knoke, David Changing Organizations: Business Networks in the New Political Economy. Boulder, CO: Westview. Leenders, Roger Th. A. J. and Shaul M. Gabbay (eds.) Corporate Social Capital and Liability. Boston: Kluwer Academic Publishers. Lin, Nan Social Capital: A Theory of Social Structure and Action. New York: Cambridge University Press. References